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A Russian company has announced the country’s first authorized digital financial asset (DFA) transaction involving a foreign currency, China’s yuan. The agreement, reportedly the largest to date under the current Russian DFA law, covers the issuance of tokens secured by commercial debt.
A licensed firm has finalized Russia’s first deal with digital financial assets denominated in foreign fiat. The transaction involved the issuance of DFAs worth 58 million Chinese yuan (about 516 million rubles or $8.26 million) secured by commercial debt.
It took place on a platform developed by Lighthouse, which was approved by the Bank of Russia in March as one of the “information system operators” authorized to manage digital financial assets. Russia’s largest bank, Sber, and the tokenization service Atomyze were also registered as such.
While Russian authorities have been working to adopt a more comprehensive legal framework for all digital assets, including cryptocurrencies, the law “On Digital Financial Assets”, enforced in January 2021, regulates some transactions with coins or tokens that have an issuer.
Officials in Moscow now want to legalize crypto payments in cross-border settlements and expand the use of the ruble and the national currencies of partners such as China in foreign trade. The main reason is to circumvent restrictions imposed by the West over the war in Ukraine and to reduce Russia’s dependence on the US dollar and euro.
Cited by Russian crypto news outlet RBC Crypto, Lighthouse pointed out that the first DFA operation involving foreign currency has also become the largest placement of its kind in the country’s digital financial asset market.
The maturity of issued tokens is 29 days and the interest rate is 4%, the fintech company said, highlighting the advantages of DFAs over short-term lending in rubles, which have an annual interest rate of 9 – 10%. It also noted that DFAs reduce the risk to issuers of losses from currency fluctuations.
Director General of Lighthouse, Denis Iordanidi, believes that the new financial instrument will provide an opportunity to make cheap short-term investments without competing with the traditional bond market that offers long-term financial investments. According to a survey conducted in November, 37% of Russian companies are ready to enter the DFA market as issuers, the report added.
Do you expect Russian-licensed platforms to continue issuing digital assets linked to foreign currencies such as yuan? Tell us in the comments section below.
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